Microsoft on Monday confirmed plans to reshuffle its Windows unit, shifting executives and creating a new division more tightly focused on development efforts.

As first reported by CNET News.com, a new Windows Core Operating System division will be headed by Brian Valentine, currently senior vice president of the Windows division. That unit will focus on the development of new Windows technologies, creating a larger separation between the development and product teams at Microsoft.

The move comes as Microsoft gears up for Longhorn, the next major release of Windows. Longhorn is seen as a major development project for Microsoft. In addition to planning both server and desktop versions of Longhorn, Microsoft has also tied the release of a new Office version and several server software programs to the new operating system.

In an interview on Monday, Valentine said that the move should not affect the timing of Longhorn, which is expected in late 2005 or 2006.

"This isn't a statement about Longhorn's schedule," Valentine said. "It is about the way we build products."

As part of the move, the Windows Server team will move into the server and tools unit under Eric Rudder. Bill Veghte, who had been the senior vice president in charge of that unit, is taking up a new role as head of North American sales, reporting to overall sales chief Kevin Johnson. Responsibility for the server operating system will fall to Bob Muglia, who will continue to oversee Microsoft's efforts in storage and management.

Will Poole, head of the Windows Client unit, remains in that role, but now reports directly to Jim Allchin, the group vice president who heads Microsoft's overall platforms business. Several of the executives responsible for Windows' key components will report to Valentine, as will Mike Nash, the head of Microsoft's security effort.

"The intention is that the core OS platform is consumed by the server and client (units)," Valentine said. Specific product units would then have their own engineering teams that can customize Windows for various purposes, such as desktop computers and servers as well as more specialized devices such as tablet computers or 64-bit computers.

Microsoft is also shifting two other executives as part of the reorganization.

Sivaramakichenane "Soma" Somasegar, a corporate vice president who was head of the Windows Engineering Solutions and Services Group, is taking over as head of Microsoft's Developer division, reporting to Rudder. Dave Thompson, the vice president who headed up development for Windows Server 2003 and was part of the original Windows NT development team, will become head of Microsoft's Exchange business.

The restructuring and most of the management changes are being made immediately, Valentine said.

While not a major shift, the move helps keep Microsoft focused on both its development and business efforts, said Matt Rosoff, an analyst with market research firm Directions on Microsoft. In the new organization, Valentine's group will help keep tabs on the Windows kernel, while others will take that core and build specific products around it, Rosoff said.

"He's really in charge of the heads-down development of key technologies," Rosoff said. "He's known as a very motivating leader."

The other organizational changes, Rosoff said, reflect subtle shifts in Microsoft's business. For example, the Windows Server unit is now under the same executive--Rudder--who oversees other software. Microsoft has recently started talking about all its server software as part of the "Windows Server System," in much the same way the company has grouped much of its desktop software under the "Office System" umbrella.

Meanwhile, putting Muglia in charge of both storage and server software could mean that those areas may be coming closer together, Rosoff said, with the potential for more storage features to be built into the next version of Windows Server.

"It sort of suggests those businesses are going to be combined," Rosoff said.

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